Publisher's Notebook: How much money will Oregon bleed before Cover Oregon is fixed?

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Larry Ellison probably doesn’t care what Oregon does, or doesn’t do, with its laughingstock of a health insurance exchange.

The founder and CEO of Oracle owns the Hawaiian island of Lanai (98 percent of it) and at last count was America’s third-richest person, with enough money in the bank to tell Oregon to take its health care system and stick it where the sun doesn’t shine.

And that wouldn’t be a bad idea, even after more than $300 million in tax dollars has been spent so far (a huge chunk of that to Oracle) to build the health exchange website that doesn’t work.

Oracle was contracted to be the lead on developing the website, where Oregon residents were supposed to be able to access and be treated to some wonderful health insurance options, courtesy of Uncle Sam.

Unless you own your own island and a 288-foot yacht, $300 million is a lot of money to spend for a website that doesn’t work. And the guys we elect to keep an eye on our money have been asking the same thing you and I have been asking: “WTF?”

As you can imagine, the people we have been paying to build the website are doing a lot of finger-pointing. The project’s former IT manager, Carolyn Lawson, came out of hiding last week to say she’s tired of being the scapegoat and that there is a lot of blame to go around.

In fact, Lawson said she’s the one who was raising alarms. “I was pounding on the table,” she told The Oregonian in a page one story. “We were bleeding money.”

When a bureaucrat says you’re bleeding money, you should pay attention. It means the jugular has been severed.

Lawson said Oracle didn’t put its best people on the project and did work of “questionable quality.”

In December of 2012 — 10 months before the site was supposed to go live — former state lawmaker Patrick Sheehan sent a letter to Gov. Kitzhaber warning that the project was becoming what is commonly known as a cluster (insert f-bomb here).

“It is my understanding that we are spending $6 million a month on consulting services with Oracle to build the system from the ground up,” Sheehan wrote in that Pearl Harbor Day letter. “At each hearing, we learn about how many deliverables have been trimmed down to meet the deadline with a minimum level of compliance.”

A decision was made early on to build the site from scratch, even though there was software available that other states were using with pretty good results. He said that solution would have cost $6 million to license, $6 million in consulting and that a fully operational system could have been up in two months.

Sheehan went on to tell the governor that Lawson had been presenting “fraudulent testimony in a legislative hearing to further her self-interest — I believe in pursuit of a consulting job with Oracle.”

He ended his letter to the governor by suggesting that Lawson be fired for “openly lying to a Legislative Committee and wasting millions of taxpayer dollars.”

Lawson said she was asked to resign, but was, according to the Oregonian, “told by a state human resources official to attribute her departure to her mother-in-law’s recent death.”

You can’t make this up.

But it does give another wonderful peek inside the minds of bureaucrats, which is a scary place to look if you pay taxes.

It’s pretty bad when the federal government’s General Accounting Office wants to investigate Oregon for spending too much money. Kind of like having Bernie Madoff give you investment advice.

A story in Information Week, a business technology publication, suggests that Cover Oregon may need to start from scratch as Oracle seeks to get out while the getting is good.

A transition agreement is in place that would keep Oracle personnel on the job and the Cover Oregon website operating out of Oracle data centers while the state examines its alternatives, according to the Information Week piece by David Carr.

His story painfully points out that most of the 14 states that opted to handle their own health care enrollments (and the federal government itself) have also had problems, but that Oregon “stands out as the worst of the lot” because it is “completely lacking a site where consumers can sign up for coverage.” This despite the fact that Oregon was the first state to commit to building an exchange, securing an initial $48 million in federal funding.

On the flip side, a quick search indicates that most states have also dumped millions of tax dollars into broken websites, so Oregon isn’t the Lone Ranger when it comes to incompetence.

My money would have been on Facebook, not Oracle. Facebook has an estimated 1.23 billion users today. I wonder how tough it would have been to add a little health care application on a Facebook page. Heck, if Facebook’s data centers can handle all those cute animal videos and posts from users sharing what they ate for breakfast, they could have handled a simple insurance process.

Mark Zuckerman built Facebook in college while he was drunk, so imagine what he could have built for Oregon as a sober adult?

On Oct. 28, 2003, Zuckerman and three Harvard classmates were drinking, so they decided to build a site that would allow visitors to rate photos of co-eds.

“I’m a little intoxicated, not gonna lie,” Zuckerman wrote in a blog that detailed his plan to create what was then known as “Facemash.”

On the other hand, guys like Ellison and Zuckerman don’t mesh well with bureaucrats. They don’t speak the same language and they sure as heck don’t share the same urgency to get things done.

It’s why they own islands and the rest of us … well … are waiting for a website to launch so we can cover the cost of a colonoscopy.